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Posted by Shivali Anand
June 10, 2021 | 3-minute read (523 words)
A survey of 1,250 employees and 200 CEOs and HR leaders in the U.S. spanning five industries found 70% of hourly workers and 65% of salaried workers struggle to pay their bills, according to Alabama-based financial wellness firm Immediate. The study was conducted in late February 2021.
Some 40% of households reported their net family income had declined by 25% in 2020, mirroring a spike in unemployment. These findings, coupled with others in the survey, show the effects on workers of the pandemic on top of what economists agree have been years of stagnant wages.
But the biggest surprise the data showed was the disconnect between employees’ and employers’ perceptions of workers’ financial wellness. Among survey respondents, 87% of employers rated their staff’s financial wellness as good to excellent.
These findings are in keeping with a 2020 Society for Human Resource Management study that notes the number of employees who rate their personal financial wellness as good to excellent has been dropping since 2018.
Key findings in Immediate’s survey of employee financial wellness:
Employers misjudge their employees' financial health, despite admitting that requests for pay advances have increased, particularly among higher-income workers.
Since the beginning of the COVID-19 pandemic, approximately 46% of employers reported had seen an uptick in requests for pay advances.
Around 84% percent of employees who requested a pay advance at least once said that they would need to do so more frequently in the future.
Employees earning $75,000 or more per year report requesting multiple pay advances at a higher rate than those earning less than an annual salary of less than $50,000.
Nearly 24% of employees earning $75,000 to $100,000 and 26% of those earning $100,000 or more have requested pay advances more than six times.
More than 80% of employees reported having at least one unexpected urgent financial need in the previous 12 months. Half reported experiencing financial need at least six times in the previous year.
Around 75% of surveyed employees stated that they are “concerned” about their financial stability this year, with 36% of salaried workers stating they are “very concerned” about it.
Nearly 60% of employees who are concerned about their financial stability in 2021 are from households earning more than $75,000 annually.
Over 75% of employees report that financial difficulties negatively affect their physical health; 80% report they negatively affect their mental health.
More than 90% of employees with financial concerns say it impacts their job performance,
When faced with an unexpected healthcare cost, over 25% said they would postpone care, with salaried employees slightly more likely to delay treatment than hourly workers.
Some 68% are willing to pay for an EWA benefit themselves.
About 80% of employees surveyed say they would prefer to work for a company that provides an EWA solution over one that does not when seeking new employment.
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